GLENN DICKEY -- Salary Caps Not Keeping Salaries Down

GLENN DICKEY

Published
4:00 am PST, Friday, February 13, 1998

BASEBALL OWNERS look longingly at the salary caps in place in the NFL and the NBA, but the caps have hardly been a panacea in those sports. Indeed, owners are challenging the cap structures in both sports.

The NFL cap was no sooner in place than the richer owners began looking for a way around it.

The most obvious loophole was the "signing bonus," which is prorated for cap purposes for the

length of the contract. The 49ers have been among those who have made use of this device. There's some question now, with Denise DeBartolo York's bottom- line approach, whether they'll continue to do that, though they did restructure Steve Young's contract with a sizable signing bonus yesterday.

The effect of the signing-bonus loophole was to make it possible for teams to spend much more than the supposed cap; one year, Dallas committed more to bonuses than the actual cap amount.

Despite the revenue-sharing in the NFL, there are significant revenues that are not shared, including revenue from luxury boxes. That has led to a push for new stadiums with the boxes and caused franchise movement from large cities to smaller ones that are more eager to have franchises and will give teams sweeter deals.

Teams that haven't had extra revenues, like the Pittsburgh Steelers, will push for an elimination of the bonus loophole before the present contract with the Players Association can be extended.

But as a quid pro quo, the players are certain to demand the dropping of the "franchise player" label.

This was a concession to owners that was supposed to allow teams to keep their star quarterbacks, but it has been extended to other positions as well.

If a team puts such a designation on players, it must then offer the player the average of the top five salaries at the position. This was the basis for the battle between defensive end Sean Gilbert and the Washington Redskins last season. Gilbert sat out the year because he would not settle for the Redskins' offer of $4 million a year. The Redskins have put the same label on Gilbert this year.

The Raiders did the same with Chester McGlockton yesterday. But they'd be better off trading him. McGlockton has been seriously underpaid throughout the length of his first contract (one agent, who has no connection with McGlockton, estimated that he has been underpaid by $5-6 million over that span.) The $2.9 million he'd probably get next season as a franchise player would be considerably less than he'd get as a free agent, so he can't be a happy camper today.

In the NBA, the salary cap is a joke because of the provision that a team can pay any amount to keep its own free agents. That clause, inserted to keep stars with their teams, has generally worked, though it didn't prevent Shaquille O'Neal from moving from Orlando to the Lakers.

That exemption has led to payrolls that are far in excess of the cap, so that it has triggered a clause that allows owners to reopen negotiations after this season. Michael Jordan's salary by itself exceeds the cap. When I talked to Sacramento Kings general manager Geoff Petrie in December, he noted that the New York Knicks have a payroll of $55 million, though the cap is $27 million.

There is another unforeseen problem: the rookie salary cap. Owners put that in three years ago because they were frightened by the long-term contracts signed by two rookies, Glenn Robinson ($68 million for 10 years) and Chris Webber ($75 million for nine years).

But the rookies of three years ago will be able to sign much bigger contracts when they become free agents after this season. Minnesota has already signed Kevin Garnett to a six-year, $121 million contract, and now teammate Stephon Marbury wants a similar contract. Several teams are trying to trade their third-year players because they can't, or won't, re-sign them, including the Warriors with Joe Smith, Toronto with Damon Stoudamire, the Clippers with Brent Barry. Philadelphia has already traded Jerry Stackhouse, and Denver has traded Antonio McDyess.

So, the rookie cap will also be on the agenda in the postseason talks.

Baseball owners took a devastating strike in 1994 in a vain attempt to get a salary cap. The NBA may have a lockout next fall, and even the NFL may have some anxious moments before a strike is averted. You'll hear a lot of talk about principles, but it all comes down to money. Salary caps are supposed to set precise shares of the revenue pie, but we've seen what a fallacy that is.